Daijiworld Media Network - Mumbai

Mumbai, Jul 24: With mounting anticipation for a crop loan waiver ahead of the upcoming assembly elections, the unpaid agricultural loan amount in Maharashtra has climbed to a staggering Rs 37,392 crore as of June this year, official data from the state’s cooperation department revealed.

Of the total arrears, district central cooperative banks (DCCBs) are owed Rs 15,492 crore, nationalised banks Rs 18,000 crore, regional rural banks Rs 800 crore, and private banks Rs 3,000 crore. The growing non-repayment is severely straining the financial health of these institutions, with over 20.37 lakh farmer accounts in default.

Department insiders indicate the unpaid dues—covering short-, medium-, and long-term crop loans—could surge further, as many farmers delay repayment while awaiting a formal loan waiver announcement.

Despite appeals from Deputy Chief Minister Ajit Pawar and Agriculture Minister Manikrao Kokate urging farmers to settle their dues without waiting for a waiver, repayment remains sluggish. The government, in response, announced on July 18 (the last day of the monsoon session) that a committee would be formed to examine the feasibility of a loan waiver and assess the broader agricultural distress.

Cooperation Minister Babasaheb Patil voiced concern, stating, “Even financially capable farmers are not repaying their loans, weakening the backbone of rural credit. If this trend continues, even well-performing cooperative banks may face serious trouble.”

Each year, Maharashtra disburses an estimated Rs 70,000 crore in crop loans—65% from nationalised banks and 35% from DCCBs. Larger landholders tend to borrow from nationalised banks, while small and marginal farmers rely heavily on cooperative banks.

The financial condition of several cooperative banks, including those in Nashik, Wardha, and Nagpur, has already become fragile. Officials warn that the entire rural credit system may teeter on the brink if the current repayment freeze persists, especially with expectations of a waiver running high among farmers.

While the state provides agricultural loans at subsidised interest rates, continued non-repayment undercuts the entire lending ecosystem. As hopes ride on the proposed waiver, banking institutions and the rural economy face increasing uncertainty.